moving from managed to self-managed (Ohio)

Chase

Your first step is to identify what is not going well and why.

Make a list and be ruthless in your analysis--is the dissatisfaction with the MC or is it due to the lack of understanding on the part of the members of the Board as to what the MC is responsible for and what the Board is responsible. Or a combination of both.

Are the owners involved in the dissatisfaction? Do they understand who is responsible for what? Are their expectations realistic? What do the association documents say regarding the services provided to the owners by the Association? Are those expectations being met? Are they in the contracts with the MC and other contractors?

I'm not defending the Association or the MC, but it would serve your association well if there was strong confidence that the issues and remedies are understood before taking on self-management or hiring a new MC.

The hybrid solution you refer to generally means hiring a MC or CPA/accountant to take care of the books, pay the bills, generate monthly reports, etc. The Board would be responsible for everything else, and, as above, you should fully understand what the 'everything else' entails with respect to roles, responsibilities, and time commitments.

Self-management seems an effective process until it is in place. Those on the Board then find out just what the MC has been doing and the amount of time which is involved. It can work very well but success requires a strong commitment from the Board including the ability of Board members or appointed owners to devote time during business hours to addressing association matters.

You're a small enough community that self-managed may make sense. On the other hand, some of our regular posters refer to self-management as "self-mismanagement", and there is plenty of evidence to support that. This is especially true if you're a new community and many of your homeowners have no experience with living in an HOA.

There is *a lot* to know about managing an HOA (*) - you're in control of a multi-million dollar non-profit corporation that is regulated by your governing documents and state/federal laws. It's not a social club or fraternal organization, and it's not a democracy - it's a corporation with a corporate form of governance.

As far as being self-managed goes, handling the actual day-to-day operations requires a different set of skills than those needed by an effective board member. It also requires people with the time and willingness to do it, and that's something that can be in short supply in HOAs. I'm assuming you're actually in an HOA and not in condos. Condos seem to need more hands-on work, including for things like after-hours emergencies, so that's another consideration.

The good news is that many management companies will offer a menu of services so that you can pick and choose. It's not all or none. Another option is just hiring out the bookkeeping and handling everything else yourselves. As a general rule, I prefer hiring professionals with good track records to do the money handling. Many folks forget that their neighbors are a bunch of strangers, and they have no problems with handing the checkbook to good ol' Joe down the street. This gives me the heebie-jeebies, especially in a community where everybody is a newbie. Good ol' Joe may be a great guy who's skilled at managing money and who's as honest as the day is long. Or Joe may be drowning in debt and would be seriously tempted by a extra pot of money that's sitting there for the taking. You just don't know, so suspicion is warranted until you have knowledge that it isn't.

(* Side note abot learning the ropes: The smartest thing we ever did was becoming clients of one of the major Ohio law firms that specializes in community organizations. Google "Ohio HOA law" or "Ohio condo law" and you'll find them. The best thing they provided was education for board members, both quarterly in-person seminars held around the state as well as a quarterly newsletter. We also received unlimited free 15-minute phone calls for general questions. This was very helpful for newbie board members who haven't figured out what their declaration and bylaws are actually saying. (Disclaimer: I'm not affiliated with this firm in any way, just a satisfied client.)

This isn't about self-management per se but rather a general heads-up about the use of volunteers to do essential tasks:

Homeowners tend to be all hot to trot when it comes to saving money, but when it comes time to do the actual work they're nowhere to be found.

Or else they volunteer, and then after a few months they quit without warning and leave you scrambling to find somebody else. These volunteers weren't lying, exactly - more that they had an overly optimistic view of their available time, inclinations, or abilities.

I won't repeat my usual shtick about use of volunteers other than to summarize it with: you probably won't get professional quality work, the workers can quit at any time, it misleads homeowners about the true cost of ownership, and is not sustainable. Just because you appear to have a willing group now is no guarantee that you will continue to have them, because most people don't move into HOAs in order to have an unpaid second job. And keeping costs artificially low can come back to bite you if your governing documents require homeowner approval for assessment increases.

So make sure you know what you're working with. This can be more difficult in a new community where you don't know your neighbors very well.

All good advice. I would also add that if you can't find homeowners who are willing to help out in managing the association and need to stick with the management company, you can shop around for another one or work with the one you have in developing a performance improvement plan. Similar to what an employee would get if he/she hasn't been doing the job and the supervisor is making a last effort to give the person time to turn things around before being sacked.

After identifying what the problems are, you can have a meeting to clarify who does what, inform the homeowners accordingly if there's been confusion - that may resolve the problem, as Bill noted. If not, write out an agreement that states during the next 6 months or so, the company will work on improving certain things and then at the end of that period, you can see where you are. This should also be accompanied by educating the homeowners - sometimes people need to be reminded they shouldn't necessarily expect a response as soon as they click "send on an email or hang up after leaving a voicemail. All of that said you say you don't have any amenities and few common areas, so it may be easier to hire a bookkeeper and a handyman to address the common areas, whatever they are. whatever route you take, be sure to ask for references and check them.

And you might want to check out the CAI website and look at their education resources for new and experienced board members. There are also resources you can buy to distribute among the homeowners to educate them on what the association can and can't do. By educating everyone, you can take the pressure off each other and have some resources to help train the next batch of board members - please heed what Cathy said regarding the risks of relying on volunteers for everything. Good luck!

So good when Tim cites CAI's Board Member Tool Kit. It was recommended to me long a go right before I started serving as a director in my HOA. I strongly urge all board members, property managers and HOA member to review it!!!